What are the Market Drivers Fueling the Rare Disease Market?

Rare diseases–also go by the name Orphan diseases–are the conditions that do not affect many individuals out there in one particular geographic area. Going deeper into the definition, it also means a lesser patient pool for a therapy developed for one identified rare condition. Unfavorable drug uptake would automatically yield a lesser return on the investment done by the pharma players, thus, these diseases were abandoned or say orphaned. 

However, a piqued interest of researchers and regulatory agencies in Rare diseases and their therapies projected the domain in altogether a different light. So far, the USFDA has approved drugs and biologics for over 800 rare disease indications. After decades since the passage of the Orphan Drug Act, over 500 drugs have received orphan status from the FDA. While more than 150 orphan drugs have been approved in the EU. Thus, it can be conveniently said that the Rare disease market, which was once barren land has now become fertile ground.  

So, why in the span of the past few decades, the Rare disease domain witnessed such an exponential surge of novel launches? 

The Stance of Regulatory Agencies

First and foremost, the regulatory agencies were ready and willing, with ornaments in hand to decorate the Rare disease market with novel therapies. The US FDA is working with stakeholders, including patients, patient advocates, product developers, and researchers, to fulfill its multiple, complex responsibilities towards improving rare disease clinical development.  The FDA funds research in rare diseases through programs like the Orphan Products Grants Program, carries out the Orphan Drug Act, reviews and grants designations to Rare Disease Drugs, Rare Pediatric Diseases, and Devices, offers seven-year market exclusivity to orphan drugs, and much more. 

By the same token, the EMA plays an instrumental role in bolstering the development of safe and effective drugs, biologics, and devices for rare diseases. Drugs that receive orphan designation get benefits from protocol assistance, ten years of market exclusivity (+2 years for pediatric orphan medicines), and several other vantage benefits.

Orphan Drug Act- What it means for pharma players? 

The passage of the Orphan drug act brought a wave of orphan drug approvals and launches. To incentivize the pharma and biotech companies working in the Rare disease market, the act introduced tweaks and turns to the normal guidelines of the drug launches to facilitate the entry of pharma players into the Rare disease market.  The act grants Orphan drug designations to therapies that are under investigation for rare diseases. It provides numerous benefits including Potential Pediatric Research Equity Act (PREA) requirements exemption, Waiver of the marketing application user fee, Tax credits, and research grants for qualified clinical testing expenses, FDA protocol assistance, and Post-approval certain years of the orphan drug market exclusivity. Further, after the patent expiry ends, a pharma sponsor can investigate the same drug in different rare conditions to extend the time period of reaping benefits. 

Research Grants

Through the Congressionally-funded Orphan Products Grants Program, the U.S. FDA last year in October awarded six new clinical trial research grants to principal investigators from academia and industry worth over USD 16 million over the next four years. 

These trial research grants play an important role in supporting and enhancing the studies and R&D in the domain that are least explored. To date, the FDA’s grants program has supported research and advanced the therapies to marketing approval of several treatments for rare diseases. 

Some of the recent approvals supported by the grants program include teprotumumab, for the treatment of a rare thyroid eye disease, and triheptanoin, for the treatment of pediatric and adult patients with molecularly confirmed long-chain fatty acid oxidation disorders. (Source: FDA)

However, in the end, developing therapies and drugs for rare diseases is a team sport and a team effort. 

Shorter Clinical Trials 

Conducting clinical trials for Rare diseases is convenient. The time period from phase II to market approval is relatively shorter for rare drugs owing to shorter and smaller clinical trials. Further, these orphan drugs are granted FDA fast track designation. Moving forward, the timelines for the FDA approval are 10 months for orphan drugs v/s 13 months for non-orphan drugs.

Influx of Pharma companies in Rare disease market 

There are several pharma and biotech companies worldwide that are indulged in different profiles of rare diseases. Pharma companies including Celgene, Novartis, BMS, Roche, Alexion Pharma, Pfizer, Vertex Pharma, Merck AbbVie, J&J, Spark Therapeutics, bluebird bio, Biogen, Amgen, along with Tetra Therapeutics, Zynerba Pharmaceuticals, Ovid Therapeutics, Confluence Pharmaceuticals, Neuren Pharmaceuticals, Takeda, Alexion, Omeros Corporation, Apellis, Novartis, ChemoCentryx, Acer Therapeutics, Evox Therapeutics, AstraZeneca, Genentech, Recursion Pharmaceuticals are working proactively to advance the Rare disease market. 

This implies the enthusiasm and willingness of the pharmaceutical industry to transform the rare disease market. Pharmaceutical companies, including pharma goliaths along with small, narrowly-focused biotech startups, are in the same vein as the rare diseases market. 

Chance to Expand Geographically 

The access to orphan drugs remains uneven across the world. While the developed or rich countries happen to have the access majorly fine, the same remains bleak in the case of developing and underdeveloped countries. Thus, the pharmaceutical industry engaged in the Rare disease market has open hand opportunities to explore the emerging markets, conduct clinical trials, and set up their manufacturing hubs. 

Therefore,  middle-income and emerging markets are although less prominent in their stand in Rare disease therapy development, however, have significant growth potential.  

To sum it all, developmental drivers including incentives, shorter development timelines, and high rates of regulatory approval make Rare disease drug development an economically viable prospect to take on, even if it is for a small patient pool. However, there are some aspects that linger across the board and are concerns of decision-makers and payers. The price of orphan drugs remains at the center of the table. Pharmaceutical companies justify the cost in the name of the rarity of the condition, recouping the expenses, unavailability of any alternative, while pharma stakeholders and payers debate on the grounds of cost-effectiveness, and clinical evidence of the drug’s benefits. Then, there is hesitation from the insurance companies to provide reimbursements of rare drugs attributed to lack of funding. Conclusively, opportunities and hurdles in the Rare disease market go hand in hand. With factors driving the Rare disease market domain forward, there are factors that are sailing against the current. Nevertheless, with hundreds of new rare-disease treatments in the armamentarium and several more in the pipeline, Rare drug development has become a highly profitable industry.